Many aren’t, right now. The stock market’s so-called fear gauge, the VIX, is at 12.14, the lowest level of the year. Not much fear there.

But digging a little deeper into CBOE’s volatility index tells a different story.

Jason Goepfert, founder of Sundial Capital Research and author of the SentimenTrader Daily Report, notes that options traders are increasingly betting on higher volatility in the months ahead.

The so-called put/call open interest ratio for the VIX has slumped to 0.33. That means options traders are holding an increasing amount of call options, which profit from a rise in the VIX, relative to put options. Since 2008, each time the ratio has fallen this much, the VIX has spiked about 70% at some point over a three-to-six-month time horizon, he says.

“I would definitely not up my equity exposure in this market at all,” Janna Sampson, co-chief investment officer at OakBrook Investments, which oversees $3.6 billion in Lisle, Ill, told WSJ’s E.S. Browning. “But to pull out…” She isn’t going to do that either, she says.

To be sure, January isn’t even half over. There is plenty of time for the market to stage a January rally. Both the Dow and S&P 500 are less than 1% away from last year’s record highs.

Earnings season also kicks it up a notch, which could give the market some short-term direction. Announcements from the likes of J.P. Morgan Chase & Co., American Express Co. and Intel Corp are expected this week.

But the stock market’s slow start to 2014 appears to be enough for a growing number of options traders to bet on higher volatility in the months ahead.

For many bulls, that isn’t a pleasant sight.

Morning MoneyBeat Daily Factoid: On this day 14 years ago, Microsoft chairman Bill Gates relinquished his role as CEO of the software giant. The anniversary comes as Microsoft is currently in the midst of a search for its next CEO.

STOCKS TO WATCH

Yum Brands is expected to announce sales figures for December. The stock was downgraded to equalweight at Morgan Stanley on Thursday on lingering concerns about its performance in China. “YUM is still a great secular emerging markets growth story,” John Glass, an analyst at Morgan Stanley, said in a report.

Wendy’s is scheduled to release its preliminary fourth-quarter results. Analysts surveyed by FactSet are projecting earnings of 6 cents a share on revenue of $606 million. The stock is rated underweight with a price target of $7 at Morgan Stanley. “Reaching 2%-3% [comparable sales] goal has been a perennial challenge for Wendy,” said Glass.

On the other hand, he upgraded McDonald’s to overweight with a price target of $115, noting that it is a laggard with underappreciated competitive advantages. “Fundamentals are disappointing, but not abysmal,” he said, adding that the management has diagnosed its weakness and the company has a sound business model.

MUST READS (LINKS)

Quiet Start Puts U.S. Investors in a Fix: “After a bang-up 2013, the stock market is starting 2014 with a whimper. The uncharacteristic dip is leaving investors in a tough position: Selling now could protect them from further declines but could also mean they would miss out on the gains most experts are still forecasting for stocks this year.”

Stock-Picking Hedge Funds Win in 2013: “The hedge funds that achieved the best results did so less by employing sophisticated strategies or using leverage than simply picking the right stocks.”

Banks Reassess Internship Programs: “With college students increasingly eschewing Wall Street for Silicon Valley and elsewhere, bank executives are reconsidering the rite of passage for interns, while others are taking steps to ease conditions for young people.”

Heard on the Street: Google Redraws Detroit’s Map: “In the race to build the smart vehicle of the future, Google’s mapping software provides a real edge.”

Banks Get a Break on Leverage-Ratio Rules: “World banking regulators said they would soften the terms of a rule meant to ensure banks’ soundness, bowing to pressure from banks that had argued it would stifle their lending to consumers and businesses.”

Engineering Companies Plan Tie-Up: “British energy-services company Amec said Monday it has provisionally agreed on a $3.2 billion cash and shares acquisition of U.S.-listed but Switzerland-based rival Foster Wheeler.”

Total Invests in U.K. Shale Gas: “France’s Total said Monday it bought a 40% stake in two shale-gas exploration licenses in the U.K.—marking the first time one of the world’s major oil companies has turned its attention to Britain’s unconventional gas reserves.”

Metro First-Quarter Sales Fall: “German retailer Metro said Monday sales in its first quarter were lower than a year ago, pressured by currency effects and weak holiday sales.”

Airbus Posts Record Jet Orders: “Airbus, the commercial arm of aerospace and defense company Airbus Group, Monday said it landed orders for 1,619 planes in 2013, setting a new industry record and topping U.S. rival Boeing 's annual order intake.”

All of Europe Awaits Hollande’s Cure: “Many countries have been labeled the ‘Sick Man of Europe’ over the years. Now it is France’s turn. As the crisis countries of Southern Europe start to show signs of recovery, the spotlight has swung with remarkable speed onto the Continent’s second-largest economy, writes Simon Nixon.”